NasdaqGS:CNXN

Stock Analysis Report

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Executive Summary

PC Connection, Inc., together with its subsidiaries, provides a range of information technology (IT) solutions. More Details


Snowflake Analysis

Flawless balance sheet and good value.


Similar Companies

Share Price & News

How has PC Connection's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CNXN has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.4%

CNXN

-1.8%

US Electronic

-1.1%

US Market


1 Year Return

6.5%

CNXN

6.6%

US Electronic

15.0%

US Market

Return vs Industry: CNXN matched the US Electronic industry which returned 7.1% over the past year.

Return vs Market: CNXN underperformed the US Market which returned 15.6% over the past year.


Shareholder returns

CNXNIndustryMarket
7 Day2.4%-1.8%-1.1%
30 Day13.9%6.3%2.9%
90 Day8.0%5.7%5.7%
1 Year7.2%6.5%7.7%6.6%17.6%15.0%
3 Year81.5%76.1%17.5%14.0%38.9%29.7%
5 Year120.7%107.9%79.5%71.0%78.4%58.4%

Price Volatility Vs. Market

How volatile is PC Connection's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is PC Connection undervalued compared to its fair value and its price relative to the market?

19.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CNXN ($47.06) is trading below our estimate of fair value ($58.2)

Significantly Below Fair Value: CNXN is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: CNXN is good value based on its PE Ratio (18.1x) compared to the US Electronic industry average (26x).

PE vs Market: CNXN is good value based on its PE Ratio (18.1x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: CNXN is poor value based on its PEG Ratio (2.4x)


Price to Book Ratio

PB vs Industry: CNXN is good value based on its PB Ratio (2x) compared to the US Electronic industry average (2.2x).


Next Steps

Future Growth

How is PC Connection forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

7.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CNXN's forecast earnings growth (7.5% per year) is above the savings rate (2.2%).

Earnings vs Market: CNXN's earnings (7.5% per year) are forecast to grow slower than the US market (22.2% per year).

High Growth Earnings: CNXN's earnings are forecast to grow, but not significantly.

Revenue vs Market: CNXN's revenue (0.7% per year) is forecast to grow slower than the US market (10% per year).

High Growth Revenue: CNXN's revenue (0.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if CNXN's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has PC Connection performed over the past 5 years?

13.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CNXN has high quality earnings.

Growing Profit Margin: CNXN's current net profit margins (2.5%) are lower than last year (2.6%).


Past Earnings Growth Analysis

Earnings Trend: CNXN's earnings have grown by 13.3% per year over the past 5 years.

Accelerating Growth: CNXN's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CNXN had negative earnings growth (-4.6%) over the past year, making it difficult to compare to the Electronic industry average (-18%).


Return on Equity

High ROE: CNXN's Return on Equity (11.2%) is considered low.


Next Steps

Financial Health

How is PC Connection's financial position?


Financial Position Analysis

Short Term Liabilities: CNXN's short term assets ($791.7M) exceed its short term liabilities ($308.2M).

Long Term Liabilities: CNXN's short term assets ($791.7M) exceed its long term liabilities ($34.9M).


Debt to Equity History and Analysis

Debt Level: CNXN is debt free.

Reducing Debt: CNXN had no debt 5 years ago.

Debt Coverage: CNXN has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: CNXN has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

What is PC Connection current dividend yield, its reliability and sustainability?

0.68%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: CNXN's dividend (0.68%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.65%).

High Dividend: CNXN's dividend (0.68%) is low compared to the top 25% of dividend payers in the US market (4.63%).


Stability and Growth of Payments

Stable Dividend: CNXN is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: CNXN is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of CNXN's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

  • Explore strong dividend paying companies in the Tech industry.

Management

How experienced are the management team and are they aligned to shareholders interests?

18.7yrs

Average board tenure


CEO

Tim McGrath (61 yo)

9.17yrs

Tenure

US$4,035,279

Compensation

Mr. Timothy J. McGrath, also known as Tim, has been the Chief Executive Officer of PC Connection, Inc. since August 2011 and has been its President since May 2010. Mr. McGrath served as the President and C ...


CEO Compensation Analysis

Compensation vs Market: Tim's total compensation ($USD4.04M) is about average for companies of similar size in the US market ($USD4.48M).

Compensation vs Earnings: Tim's compensation has been consistent with company performance over the past year.


Board Members

NamePositionTenureCompensationOwnership
Patricia Gallup
Co-Founder26.08yrsUS$767.38k1.83%
$ 22.5m
David Hall
Co-Founder & Directorno dataUS$175.00k0.099%
$ 1.2m
David Beffa-Negrini
Independent Director26.08yrsUS$84.38k0.37%
$ 4.5m
Barbara Duckett
Independent Director11.33yrsUS$95.00k0.049%
$ 606.0k
Jack Ferguson
Independent Director4.42yrsUS$100.00k0.32%
$ 4.0m

18.7yrs

Average Tenure

71yo

Average Age

Experienced Board: CNXN's board of directors are seasoned and experienced ( 18.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: CNXN insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

PC Connection, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: PC Connection, Inc.
  • Ticker: CNXN
  • Exchange: NasdaqGS
  • Founded: 1982
  • Industry: Technology Distributors
  • Sector: Tech
  • Market Cap: US$1.229b
  • Shares outstanding: 26.13m
  • Website: https://www.connection.com

Number of Employees


Location

  • PC Connection, Inc.
  • 730 Milford Road
  • Merrimack
  • New Hampshire
  • 03054-4631
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CNXNNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDMar 1998
PCCDB (Deutsche Boerse AG)YesCommon StockDEEURMar 1998

Biography

PC Connection, Inc., together with its subsidiaries, provides a range of information technology (IT) solutions. The company operates through three segments: Business Solutions, Enterprise Solutions, and Pu ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/28 00:38
End of Day Share Price2020/10/27 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.